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The integrity of the supply chain is under a microscope these days as consumers want to know where their products came from and under what conditions they were produced. However, “transparent” and “traceable” are often used interchangeably, creating confusion about how they are used to describe a supply chain.
Let’s start with the dictionary definitions of both terms:
- Trace (verb): “to follow or study out in detail or step by step; to discover by going backward over the evidence step by step.”
- Transparent (adjective): “visibility or accessibility of information especially concerning business practices.”
In a supply chain, we need to trace the steps a product goes through before it reaches a consumer.
For a supply chain to be transparent, it’s important that all information is clearly and completely documented when traced. Essentially, there can be a traceable supply chain, but if it doesn’t include all important information, it won’t be transparent.
Supply Chain Traceability
Supply chain mapping tools make it easier to document the steps necessary to get products to market. However, this map cannot be created in a vacuum. Ideally, it will involve a collaboration between supply chain partners who document all steps.
According to the Sustainable Business Network: “To ensure traceability along the supply chain, a system is needed that records and follows the trail as products, parts and materials come from suppliers and are processed and ultimately distributed as end products — including information on the components of products, parts and materials, product quality, safety and labelling.”
This requires business partners to work together to develop a comprehensive map that details all information. While there are many tools available, there are five processes that need to be addressed:
- Plan — What is the plan for companies to source, make, deliver, and return for every product type?
- Source — Where will source materials come from?
- Make — How and where will products be made?
- Deliver — How will products be delivered to customers?
- Return — How will products be returned and reviewed?
These maps are a valuable starting point but also provide an opportunity to identify process improvements and inefficiencies. With robust data analytics, companies can now identify enterprise-wide improvements that benefit customers and the bottom line.
A traceable supply chain is just the beginning but does require a holistic view with inputs from supply chain partners and departments throughout an organization.
Supply Chain Transparency
Making sure the supply chain includes all important information makes it transparent. Transparency focuses on getting the entire picture of the supply chain to identify gaps where information may not only be missing but damaging resources in the process. Identifying products that endanger humans, wildlife, or the environment has been a key goal of transparent supply chains that ultimately lead to sustainable products.
Increased consumer demand for organic, fair trade, and sustainable products is increasing, but their legitimacy must be documented and proven to the customer. Large multi-national firms and local businesses alike must provide evidence that their products are sustainable by showing the supply chain is both traceable (documented) and transparent (comprehensive and truthful).
5 Articles from Thomas Insights on Tracing & Transparency
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